Walmart Q2 Earnings Preview: This 'Safe-Haven' Stock Is 'One Of The Few Beat-And-Raise Stories In Retail'

Retail giant Walmart Inc WMT could provide analysts and investors a better picture of how inflation impacts consumer spending and shopping habits when it reports second-quarter financial results before the market opens on Thursday.

Earnings Estimates: Analysts expect Walmart to report second-quarter revenue of $168.57 billion, according to data from Benzinga Pro.

The company reported revenue of $161.63 billion in last year's second quarter. Walmart has beaten analysts' revenue estimates in 17 straight quarters.

Analysts expect Walmart to report second-quarter earnings per share of 64 cents, compared to 61 cents per share reported in last year's second quarter. Walmart has beaten analysts' earnings per share estimates in eight of the last 10 quarters. It has beaten or made estimates in eight straight quarters.

Walmart's guidance calls for second-quarter earnings per share in a range of 62 cents to 65 cents.

The earnings report comes with Walmart stock up 30% year-to-date, as seen on the Benzinga Pro chart below, beating the performance of many broad stock market indexes.

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What Experts Are Saying: Walmart could be a "safe haven in weak markets," JPMorgan analyst Christopher Horvers said in a recent investor note.

The analyst has an Overweight rating and $81 price target. Walmart could beat earnings estimates and raise guidance, a rare occurrence in the retail sector of recent, Horvers said.

"Defense and offense win championships," he added.

The analyst said there is an increased risk of concern from Walmart investors of a potential consumer deceleration.

"Our mid-July Nielsen analysis suggested upside to U.S. grocery comps while value players continue to gain share and grocery price gaps widening."

Horvers said it's potential that Walmart has been cautious on the revenue outlook for the second half of 2024.

"WMT is likely one of the few beat-and-raise stories in retail, it continues to gain share, it's a safe-haven stock."

Placer.ai data points to potential higher customer counts in the second quarter with visits up 3.9% for Walmart and 7.5% for Sam's Club on a year-over-year basis in the second quarter.

Freedom Capital Markets Chief Global Strategist Jay Woods highlighted Walmart as one of the most important earnings reports of the week when showing the technical of the stock in his weekly newsletter.

"Walmart remains the cream of the crop in the retail and consumer staple world," Woods said.

Woods said the hope for Walmart is that they overcome a trend of stocks beating earnings and then not making a new leg higher for their stock.

"The downside is that when companies have missed they tend to fall quickly and test key support areas."

Key Items to Watch: Walmart's earnings report could provide key commentary on consumer shopping trends including size of order, trading down from brand names to private brands and more.

With inflation concerns easing, Walmart could provide a look on if this means higher ticket items have seen an uptick in volume.

Walmart's ecommerce sales could be another key item to watch. The company reported a 21% increase ecommerce sales in the first quarter.

Walmart also reported a 24% increase in advertising revenue in the first quarter. This could also be a key item to watch in Thursday's report.

WMT Price Action: Walmart shares trade at $68.44 on Wednesday versus a 52-week trading range of $49.85 to $71.33.

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